Car sales up in Northern Ireland - but consumer spending crisis looms
DEMAND for a new set of wheels in Northern Ireland rose in August - but just fractionally compared to the whopping 23.1 per cent UK-wide uplift.
Some 3,701 no-miles cars were registered last month in the north compared with 3,647 during the same month in 2017, the Society of Motor Manufacturers and Traders (SMMT) said.
That was just 1.48 per cent higher than a year ago, and means car sales locally are at a five-year low.
And it has reinforced fears that the north is in the grip of a ‘cost of living crisis’, given that buying a car is the largest discretionary purchase outside of buying a home.
Ulster Bank economist Ricard Ramsey said that while recruitment agencies may be capitalising on strong demand within a buoyant labour market, car dealers conversely continue to experience tough trading conditions despite the lack-lustre rise.
“The longer term trend for new car sales in Northern Ireland remains downward," he said.
"So far this year there have been 38,407 new cars sold in Northern Ireland, which is three per cent below the corresponding period last year and more than eight per cent lower than the same period in 2016.
"Furthermore, the volume of new car sales sold year-to-date represents the weakest in five years.
"The UK market is faring better, although sales between January and August were the weakest in four years. But inlike the Northern Ireland market, overall UK car sales experienced record highs in 2017 whereas here we are almost a quarter below 2007’s record high."
Mr Ramsey says the figures point to consumer spending going forward being challenging.
"Households’ disposable incomes will be squeezed further in 2019. Rates and private sector rents are outpacing inflation and wage growth. Meanwhile electricity and gas prices are set for double-digit increases in the coming weeks," he said.
"Food price inflation is also set for a pick-up in inflation in the coming months linked to the unusually hot and dry summer. Motoring costs are also on the rise with petrol and diesel prices up 11 per cent and 13 per cent respectively over the last year. Petrol and diesel prices are currently at four-year highs.
“And with the cost of living squeeze set to intensify in the year ahead, we can expect consumers to rein back on non-essential or discretionary expenditure in areas like retail, leisure and entertainment."
The Volkswagen Polo overtook the Ford Fiesta to be the top-selling model in Northern Ireland in August, according to the SMMT.
Other models to sell into the three figures during the month were the Ford Kuga, Volkswagen Golf, Skoda Superb, Nissan qashqai and Renault Captur.